Money sent home by overseas Filipino workers (OFWs) jumped to its highest level in seven months in July, but not enough to boost the year-to-date amount, data from the Bangko Sentral ng Pilipinas (BSP) showed on Tuesday.
Personal remittances — personal transfers in cash or kind and capital transfers between households — settled at $3.08 billion in the month, a 12.71-percent and 7.6-percent increase from $2.73 billion in June and $2.86 billion in July 2019, respectively.
The amount was the largest since the $3.12 billion posted last December.
“The growth was attributed to the 12.6-percent increase in remittances from land-based workers with work contracts of one year or more to $2.467 billion in July 2020 from $2.192 billion in July 2019,” the central bank said in a statement.
Remittances from sea-based workers dropped by 9.2 percent from to $557 million in July from $613 million a year ago, mainly because of “the repatriation of [these] workers amid the ongoing Covid-19 (coronavirus disease 2019) pandemic.”
The latest figure failed to support the year-to-date figure, which only reached $18.65 billion, a 2.4-percent decrease from $19.11 billion in the same period in 2019.
Cash remittances, which only count money coursed through banks, hit $2.78 billion in July, a 12.9-percent rise from $2.46 billion a month earlier and 7.8-percent growth from $2.58 billion a year ago.
The BSP credited the improvement to “the 12.6-percent increase in land-based workers remittances, but was slightly tempered by the 9.2 percent decrease in sea-based workers’ remittances.”
For the first seven months, cash remittances fell by 2.4 percent to $16.80 billion from $17.21 billion the previous year.
“Cash remittances from land-based and sea-based workers continued to be lower than their levels in 2019 by 1.5 percent to $13.232 billion from $13.429 billion, and 5.8 percent to $3.57 billion from $3.789 billion, respectively,” the Bangko Sentral said.
By country source, year-to-date remittances from the United States, Japan, Singapore, Qatar and Taiwan were countries that registered continued growth, while declines were noted in Saudi Arabia, United Arab Emirates, Germany, Kuwait and the United Kingdom.
The US had the highest share to total OFW remittances from January to July at 40.1 percent. It was followed by Singapore, Saudi Arabia, Japan, UK, UAE, Canada, Qatar, Hong Kong and Taiwan.
“The combined remittances from these countries accounted for 78.9 percent of total cash remittances,” the central bank said.
In a comment, ING Bank Manila senior economist Nicholas Antonio Mapa credited the latest remittance figues to the lifting of strict lockdowns in the host countries, “which allowed OFs to return to work and remit funds after being trapped in their homes for an extended period of time.”
“[Another] reason for the 7.8-percent increase in [cash] remittances could be traced to exchange-rate nuances with the US dollar retreating significantly against global currencies, inflating remittances sent home in EUR (euro) and JPY (Japanese yen) in dollar terms,” he said.
Despite this, Mapa expects remittances to weaken or moderate as job market challenges and layoffs make it difficult for OFWs to send more funds home.
The Bangko Sentral sees these inflows easing by 5 percent this year “due mainly to large repatriation of workers and major economic disruptions in host countries.”
Next year, it expects remittances to rebound by 4 percent.